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Wrongful Default Prevents House Purchase? £8000 To £100000+ Damages Now Available

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28/4/2008

I'm keen to spread this news. It's only just been awarded here in Aberdeen. I'm unsure if England even know about it...

I was wrongly defaulted by a bank for 6 years. I was prevented from purchasing a home for my new family.

I sued the bank for the difference in house price and I'm half way there (So far I've been awarded £116 000 and I just need to win the appeal for a figure over £200 000)

If you'd like to take advantage of this new ruling your solicitor should be able to help. (Legal Aid should now be possible). At the very least you should be able to get £8000.

15/6/2010

Update. Appeal judges in Scotland's highest court have decided that I was never entitled to rescind the credit agreement. I get nothing! I assume the Supreme Court will sort this but I'll need help from a lawyer that's interested in taking this on as a "pet project". The law really does need looking at. This is a travesty of justice. Again.

http://www.scotcourt...2010CSIH49.html

Looks like the blokes run up over £200,000 worth of Legal fees as well! rolleyes.gif

http://forums.moneysavingexpert.com/showthread.php?t=885979

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Bank mistakenly said he didn't keep up with repayment, when in fact he did. Ruined his credit rating.

Actually he didn't, He attempted to void the agreement (and return the goods) on the basis of a false claim by the seller.

Though this doesn't mean that I think he's wrong.

He is entitled to reject goods on this basis and it's a bit silly if this doesn't also void the finance agreement.

tim

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He is entitled to reject goods on this basis and it's a bit silly if this doesn't also void the finance agreement.

It depends on if your finance agreement is with the seller or a third party.

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It depends on if your finance agreement is with the seller or a third party.

True. However, this is an interesting case as the agreement was with a 3rd party.

The result is that, the finance company is liable under law, together with the supplier, if the goods are defective/inappropriate, etc. This is exactly the same as a credit card company is liable.

However, and this is where this punter got hosed, the credit agreement is NOT void.

The punter was mis sold a laptop by PC world. He returned the laptop, but while arguing with PCW over the misselling refused to make payments on the finance agreement on the basis that it was void. A first judge agreed and awarded damages, but an appeal judge said that this was wrong, and the credit agreement with a 3rd party could not be voided. Instead, the only legal option would have been to continue making payments on the loan, while suing PCW and/or the finance company over the misselling.

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The punter was mis sold a laptop by PC world. He returned the laptop, but while arguing with PCW over the misselling refused to make payments on the finance agreement on the basis that it was void. A first judge agreed and awarded damages, but an appeal judge said that this was wrong, and the credit agreement with a 3rd party could not be voided. Instead, the only legal option would have been to continue making payments on the loan, while suing PCW and/or the finance company over the misselling.

Observation: must be a dumb punter. Dumb to go to PC World; dumb to enter the credit agreement. Oh, and looks like he didn't keep the lender adequately informed, so (in the circumstances) dumb to go to law.

If you need credit, put the whole thing on a card. That way, when you take it back, your card gets the refund. No third party to complicate and confuse the issue.

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That way, when you take it back, your card gets the refund. No third party to complicate and confuse the issue.

I think the point was PC World wouldn't refund him.

The advantage of paying on card however is you are covered by their consumer protection scemes.

And I wouldn't assume PC World were in the wrong, it's common for customers to try to take stuff back simply because they find they can't afford it or because a mates tells them where they could get a better deal. Probably 30% of their high-value returns are simply because people have found a better deal. Usually they will claim it's faulty when it isn't.

I worked there for 2 years in the 90s and we had someone try to return a PC after over a year demanding we cancel the credit agreement. They had used it for there last year or so of uni and didn't need it when they finished the course. They told us they didn't need it any more and couldn't justify the payments so they were returning it and we woud had to refund it as they weren't going to pay. This was in the days when PCs cost £800+

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I worked there for 2 years in the 90s and we had someone try to return a PC after over a year demanding we cancel the credit agreement. They had used it for there last year or so of uni and didn't need it when they finished the course. They told us they didn't need it any more and couldn't justify the payments so they were returning it and we woud had to refund it as they weren't going to pay. This was in the days when PCs cost £800+

hmm, indeed. Some people think the phrase 'If you do not keep paying, we may take your goods from you'

actually means 'If I hand the goods back I no longer have to pay'

Used to happen a lot with Welcome car finance- car driven with zero maintenance until something (usually cambelt)) broke, then payments stop. Car is worth about £500 in the state it was left in, but outstanding debt was invariably several thousand.

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It depends on if your finance agreement is with the seller or a third party.

It seems to have been arranged by the seller.

Therefore the purchasor has section 75 protection from the lender

tim

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It seems to have been arranged by the seller.

Therefore the purchasor has section 75 protection from the lender

Correct. The important thing in this case is that section 75 only means that the lender is liable if the goods are defective, missold, etc.

If PC world refused to refund the buyer for the missold laptop, then section 75 would mean that the lender would be liable to give a refund (or supply an appropriate laptop) - and that he could have asked (or sued) the lender for this refund.

Section 75 does not mean that the credit agreement is void if the sale is voided. In this case, the buyer refused to keep to the credit agreement on the basis that the goods had been returned, because they were missold - but the court has ruled that he was wrong to do so, and the lender was correct to make a record of a default.

And I wouldn't assume PC World were in the wrong

In this case, there is no doubt that they were.

The buyer specifically asked for a laptop with a modem, and made clear to the sales rep that it had to have a modem. The salesman selected a laptop but refused to allow the box to be opened to check the specification. He then advised the buyer that if he wanted to check, he could buy it, and then return it for his money back. The laptop was returned within 2 hours of purchase, as it didn't have a modem. Despite this, PC world refused a refund as the laptop was not faulty, and their policy was only to refund for faulty goods. The buyer left the laptop at the shop, telling them he had rejected the laptop as it was mis-sold. So PC world, posted it back to his home address stating that the sale was final. These facts were as admitted by PC world in court.

Edited by ChumpusRex

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Correct. The important thing in this case is that section 75 only means that the lender is liable if the goods are defective, missold, etc.

If PC world refused to refund the buyer for the missold laptop, then section 75 would mean that the lender would be liable to give a refund (or supply an appropriate laptop) - and that he could have asked (or sued) the lender for this refund.

Section 75 does not mean that the credit agreement is void if the sale is voided. In this case, the buyer refused to keep to the credit agreement on the basis that the goods had been returned, because they were missold - but the court has ruled that he was wrong to do so, and the lender was correct to make a record of a default.

In this case, there is no doubt that they were.

The buyer specifically asked for a laptop with a modem, and made clear to the sales rep that it had to have a modem. The salesman selected a laptop but refused to allow the box to be opened to check the specification. He then advised the buyer that if he wanted to check, he could buy it, and then return it for his money back. The laptop was returned within 2 hours of purchase, as it didn't have a modem. Despite this, PC world refused a refund as the laptop was not faulty, and their policy was only to refund for faulty goods. The buyer left the laptop at the shop, telling them he had rejected the laptop as it was mis-sold. So PC world, posted it back to his home address stating that the sale was final. These facts were as admitted by PC world in court.

If those are the facts then that is clear misrepresentation and his losses should be recoverable.

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Section 75 does not mean that the credit agreement is void if the sale is voided. In this case, the buyer refused to keep to the credit agreement on the basis that the goods had been returned, because they were missold - but the court has ruled that he was wrong to do so, and the lender was correct to make a record of a default.

This seems a perverse judgment.

ISTM the obvious way of compensating the customer for the miss-selling is to void the agreement, the alternative of giving the purchaser the purchase price and then expecting him to pay it back under the terms of the loan agreement, is just silly.

Surely the law expects option 1. Note that this is not the same as saying that the miss-selling makes the agreement void.

tim

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ISTM the obvious way of compensating the customer for the miss-selling is to void the agreement, the alternative of giving the purchaser the purchase price and then expecting him to pay it back under the terms of the loan agreement, is just silly.

Surely the law expects option 1. Note that this is not the same as saying that the miss-selling makes the agreement void.

The problem with this is simple... it would be too open to abuse as the credit company would be required to simply take the buyer at their word... no-one would offer credit.

You buy an expensive item, taking out a credit agreement.

The next day/week you see a better offer. You then return the item saying it was miss-sold. Seller says it wasn't and refuses a refund. You contact the credit company and they are required to cancel the agreement, knowing that the retailer has refused to take the goods back. The credit company now have to sue the seller, despite having no knowledge of the case or witnesses.

The current system is the only workable solution.

In reality, you should only even be going to the credit company if the seller goes bust.

In the particular sale in this thread, it does sound like the salesman was a prat... we used to have problems with sales staff like this when I was at PC World. The solution we found was that whenever a customer came back in and had been mis-advised, we would cancel the commission from the salesman in question and assign the sales/commission for the replacement item to someone else... most stores did not do this and let the salesman keep the sales/commission, as they valued sales volume over customer service, which created problems like this.

Our store had customers traveling 80+ miles from towns that had their own PC world stores as we had a reputation for getting it right.

Edited by TaxAbuserOfTheWeek

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This seems a perverse judgment.

ISTM the obvious way of compensating the customer for the miss-selling is to void the agreement, the alternative of giving the purchaser the purchase price and then expecting him to pay it back under the terms of the loan agreement, is just silly.

Surely the law expects option 1. Note that this is not the same as saying that the miss-selling makes the agreement void.

tim

I wasn't totally clear what the judgment meant in this respect.

Is it saying that the buyer who returns the goods and voids the sale has to keep paying the credit agreement and then claim the cost of paying the credit agreement back from the seller?

Edited by newdman

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I wasn't totally clear what the judgment meant in this respect.

Is it saying that the buyer who returns the goods and voids the sale has to keep paying the credit agreement and then claim the cost of paying the credit agreement back from the seller?

That is one option.

The other option is to keep paying the credit agreement, and claim the purchase price back from the lender (the law - in the same way as it makes a credit card company liable for non-supplied goods - makes the lender liable for non-supplied/defective/mis-sold goods).

The problem here, was that the buyer in this case, refused to pay the credit agreement, and simply told the lender that the credit agreement was void and he wasn't going to pay.

Edited by ChumpusRex

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That is one option.

The other option is to keep paying the credit agreement, and claim the purchase price back from the lender (the law - in the same way as it makes a credit card company liable for non-supplied goods - makes the lender liable for non-supplied/defective/mis-sold goods).

The problem here, was that the buyer in this case, refused to pay the credit agreement, and simply told the lender that the credit agreement was void and he wasn't going to pay.

so, say the purchase price is £500 and that the payments of capital and interest due under the credit agreement total £700 over say 5 years

at the point of sale/credit agreement, the lender gives £500 to the seller

the buyer then legally voids the sale for misrepresentation

so the buyer claims £500 back from the lender but keeps paying the credit agreement

presumably he can then claim back the extra cost of paying the interest (£200) from the seller?

EDIT just a thought. If he's bought with a credit agreement he's not actually paid anything himself, so how can he claim the purchase price back from the lender?

Edited by newdman

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so, say the purchase price is £500 and that the payments of capital and interest due under the credit agreement total £700 over say 5 years

at the point of sale/credit agreement, the lender gives £500 to the seller

the buyer then legally voids the sale for misrepresentation

so the buyer claims £500 back from the lender but keeps paying the credit agreement

presumably he can then claim back the extra cost of paying the interest (£200) from the seller?

EDIT just a thought. If he's bought with a credit agreement he's not actually paid anything himself, so how can he claim the purchase price back from the lender?

It makes sense why the judgement went that way. Until the case against PC World was judged then the agreement must stand and payments be made. Then when they judge rules against PC World the credit agreement can be cancelled at the expense of PC World. He tried to do too much too quickly in the wrong order. Of course the contract with the third party stands until it has all been decided in court. If we all just stopped paying 3rd party contracts because we felt something was unfair then the world would grind to a halt.

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The problem with this is simple... it would be too open to abuse as the credit company would be required to simply take the buyer at their word... no-one would offer credit.

The credit company is entitled to check on the validity of the complaint, all the way to a court if necessary.

But once they have done this, voiding the agreement seems the most sensible solution.

tim

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It makes sense why the judgement went that way. Until the case against PC World was judged then the agreement must stand and payments be made. Then when they judge rules against PC World the credit agreement can be cancelled at the expense of PC World. He tried to do too much too quickly in the wrong order. Of course the contract with the third party stands until it has all been decided in court. If we all just stopped paying 3rd party contracts because we felt something was unfair then the world would grind to a halt.

makes sense

on a slighlty different point, I think the court also said thay even if they'd ruled that the buyer's actions had voided the credit agreement then the major part of the damages he was claiming which was for his loss of profit on the place in Spain would not have been awarded as they weren't foreseeable etc. It was a really interesting case to read although I'm not claiming to have fully understood it all.

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • up 5%



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